A spokesman for the country's second largest lender, CyprusPopular Bank, told Reuters that the new measure began at 1pm localtime (11am GMT) and would remain in place until the bank reopens,or until confirmation of continued emergency funding from theEuropean Central Bank. Cyprus Popular Bank had previously limitedwithdrawals to 260 euros per day.
A government official said the restriction also applied to theBank of Cyprus.
It was initially reported that the measure was implemented onall banks in Cyprus, although it has now been confirmed that onlythe island's two biggest banks have been affected.
The news comes after Cypriot President Nicos Anastasiades tookpart in last-minute crisis talks with international lenders onSunday, in an attempt to save the country from financial meltdown.The negotiations in Nicosia to seal a bailout from the EU andInternational Monetary Fund failed to reach a solution.
Anastasiades then headed to Brussels to hold talks with EU,European Central Bank and IMF leaders ahead of a crunch meeting ofeurozone finance ministers.
Government spokesman Christos Stylianides said in a statement onSunday that Anastasiades and his team have a "very difficulttask to accomplish to save the Cypriot economy and avert adisorderly default if there is no final agreement on a loanaccord."
The news comes just one day after Cyprus and the Troika agreedto a 20 per cent tax on deposits over 100,000 euros at the Bank ofCyprus and 4 per cent on deposits held at other banks.
"Unfortunately, the events of recent days have led to asituation where there are no longer any optimal solutionsavailable. Today, there are only hard choices left," EuropeanUnion Economic and Monetary Affairs Commissioner Olli Rehn said ina Saturday statement.
Cyprus is scrambling to come up with €5.8 billion by Monday, orface being kicked out of the Eurozone. The cash is a prerequisitefor a further €10 billion in bailout funds.
Lawmakers' rejection of a previous proposal to tax all bankdeposits prompted the European Central Bank to threaten to cut offemergency funding to Cypriot banks unless a deal was reached byMarch 25. Banks have been shut all week, and are due to reopen onMarch 26.
On Saturday, at least 1,000 bank workers in Cyprus hit thestreets of the country’s capital of Nicosia. The demonstratorsmarched against the latest bailout measures taken by the country’scentral bank.
Protesters carried banners that read, “Hands off providentfunds” and “No to the bankruptcy of Cyprus.”
